Bitcoin Price Decrease Following Fed Chair Jerome Powell’s Statements

Federal Reserve Chairman Jerome Powell made some surprising comments in a recent press conference that resulted in Bitcoin’s price taking a hit. Powell stated that the central bank has no plans to hold Bitcoin as part of its reserves and projected only two rate cuts for 2025. He emphasized that the Federal Reserve is prohibited from owning Bitcoin according to the Federal Reserve Act, and any changes would need to be considered by Congress, but the Fed is not seeking any legislative alterations at this time.

Following Powell’s statements, Bitcoin prices dropped over 5%, currently sitting at around $95,000 after reaching $108,000 earlier. President-elect Donald Trump previously mentioned the potential of holding Bitcoin to stay competitive globally. Trump has expressed ambitions for the US to become the “crypto capital of the planet and the bitcoin superpower of the world,” with his family launching a cryptocurrency business and appointing a former PayPal executive as the “White House A.I. & Crypto Czar.”

The impact of Powell’s announcement was not limited to Bitcoin, as Ethereum’s ether (ETH) recorded a 10.8% drop and Dogecoin’s DOGE saw losses between 15% to 20%. According to Coindesk, approximately $1.2 billion worth of leveraged crypto derivatives trading positions were liquidated across all assets in the 24 hours following the Fed’s rate decision. This event serves as a reminder of the influence of regulatory decisions on the cryptocurrency market.